Newsletter

Kansas incomes grew slightly slower than nation as a whole in 2013

Data reflects long-term trend, low cost of living, economists say

Incomes in Kansas grew slightly slower than the national average, but that reflects long-term trends, economists said.

In Kansas, personal income grew by 2.4 percent in 2013, placing the state 27th in the nation. It rose from a total of about $124.1 billion in 2012 to $127.1 billion in 2013. Per capita income in the state was $43,916 — but that statistic is only an average based on total population, including children, and may not accurately reflect what the average worker takes home.

Personal income grew by about 2.6 percent nationwide in 2013. That was a slower rate of growth than in 2012, when it rose by 4.2 percent, according to the U.S. Bureau of Economic Analysis. All states grew slower in 2013 than in 2012, though their rates of growth varied widely.

Personal income includes wages, bonuses, rental earnings, dividends, income from interest and government transfer payments, according to the BEA. Nationwide, it grew from about $13.7 trillion in 2012 to $14.1 trillion in 2013. Per capita income averaged about $44,543 per person.

Personal income in Kansas has typically stood at about 89 percent of the nationwide income, said Tyler Tenbrink, senior labor economist with the Kansas Department of Labor, though it has fluctuated as low as 87 percent or as high as 92 percent.

The 2013 data is consistent with that, because Kansans are making about 90 percent of the national average when comparing all forms of income, Tenbrink said. The lower income may reflect the fact that Kansas workers don’t have to demand as high a wage to sustain the standard of living they want as they would in a state with a higher cost of living, he said.

“It probably is related to prices,” he said.

The percentage of growth a state’s per capita income shows can vary widely from year to year, but states’ rankings compared to one another usually don’t change drastically, said Efua Afful, an economist with the labor department.

There are sometimes exceptions, Tenbrink said, such as the case of North Dakota, which is in the midst of an oil boom.

“Sometimes when an industry is coming on strong it can move the state to the top,” he said.

North Dakota led the nation in income growth, with income rising 7.6 percent. West Virginia brought up the rear, with incomes rising just 1.2 percent.

Income growth nationwide stayed above the official measure of inflation, with prices rising 1.1 percent in 2013, compared to 1.8 percent in 2012. The official inflation figure doesn’t include volatile categories like food and fuel, however, so some people may have seen their income gains swallowed by higher bills.

The BEA attributed the lower rate of income growth in 2013 to the end of the “payroll tax holiday,” meaning workers paid about 2 percent more in taxes to support Social Security, reducing take-home pay. It also may reflect people who took dividends and salary bonuses in 2012 because they anticipated higher taxes in 2013, inflating 2012 numbers.

All major sectors showed income growth, except the civilians employed by federal government, who took home about $6.7 billion less than the year before. Most private sector industries grew slower in 2013 than in 2012, though construction and farming bucked the trend.

Growth was highest in professional services, $44.6 billion; construction, $44.3 billion; and health care, $42.5 billion. Those numbers may reflect increased hiring, however, instead of greater earnings by individual workers.